SYDNEY, Aug 30 (Reuters) - Australian business spending wassurprisingly strong last quarter as miners splashed out on newbuilding, underpinning expectations of brisk economic growth andcountering concerns about an abrupt end to the investment boom.

Thursday's data from the government showed investment rose3.4 percent in the second quarter, from the previous quarterwhen, following an upward revision, it jumped 7.7 percent. Thattopped forecasts of a 2.4 percent gain and left capital spendingup a hefty 27.4 percent for the year.

Sharp price falls in key commodities such as iron ore andcoal combined with well-publicised delays to some proposedmining projects from miners including BHP Billiton haveled to talk Australia's resource boom was dead and buried.

If so, somebody forgot to tell the miners. Planned spendingfor 2012/13 rose to a record A$181.5 billion ($187 billion),equal to no less than 13 percent of Australia's A$1.4 trillionin annual gross domestic product (GDP).

"The mining boom is not over," said Stephen Walters, chiefeconomist at JPMorgan. "We've had some commodity price weaknessso the price side of the boom is weakening but the investmentside still looks very solid.

"The capital spending numbers were reasonably decent, betterthan the 3 percent we were expecting, so that's pretty good forGDP next week."

The GDP report for the second quarter are due on Sept. 5 andanalysts have been tipping another robust rise of 0.8 percent to1.0 percent. That would follow a stunningly strong increase of1.3 percent in the first quarter and keep annual growth runningaround 4.0 percent.

STILL BANKING ON RATE CUTS

The Reserve Bank of Australia (RBA) still expects mininginvestment to run at around 9 percent of GDP over the next twoyears, far above its long-run average of 1.75 percent.

That strength has helped offset weakness in homeconstruction with approvals to build new homes sliding by asharp 17.3 percent in July. All the weakness came in themulti-unit sector, which dived 40.5 percent after upbeatoutcomes the two previous months.

The central bank cut interest rates by a total of 75 basispoints in May and June but has since sounded content to wait forthe impact of that easing to be fully felt.

As a result, markets show only a slim chance of an easing atthe RBA's September policy meeting next week. But investors arestill wagering on a cut by year-end, largely to offset the dragfrom the European debt crisis and a slowdown in China.

Interbank futures are fully priced for a move to3.25 percent in November. Overnight indexed swaps,which reflect market expectations for the future path of thecash rate, currently show 2.97 percent a year out.

Markets showed only a muted reaction to Thursday's data withthe Australian dollar steady at $1.0330.